Another Licensing Question...

[eeoo]

Hi All - My band is a bout to sign a licensing deal and there is one part of the contract that seems unusual to me but maybe it's fairly standard, I don't know. It's a non-exclusive deal, normal 50-50 split on all the upfront licensing fees. On any licensing fees that add up to $3500 or less there's a 50-50 split on the performance royalties. It seems to me that $3500 is a pretty big chunk of change for licensing fees so in essence we will be splitting our performance royalties as well. Seem fair? I have had the contract looked at by a well known and respected songwriters advocate with close ties to Taxi and he said it looks good. Any thoughts appreciated. Thanks guys. eo.

[mojobone]

Does the royalty split change somehow, if the license fee is higher than $3500? Seems to me that higher license fees (north of $5k, anyway) would only be seen in the case of the song being used in a national ad campaign by a major advertising firm/heavyweight client; I'll admit I'm confused as to why the amount of the upfront fee should affect the back end royalties.

[mazz]

No matter what percentage of the licensing fees you negotiate, you never give up your Writer's Share of the performance royalties.

So my question is: 50% of what?

The Writer's share is 50% of the entire 100% royalty amount (which you should never sign away, even on a work for hire contract), the Publisher's share is the other 50%.

So are they wanting 50% of your 50%? I doubt it but it would be good to make sure.

[eeoo]

Hey guys, thanks for chiming in. The contract states that if the up front fees are less than $3500 they shall receive 50% of the publishers share of performance royalties which implies, to me, that we would keep 100% of the writer's share plus 50% of the publisher's share and anything north of $3500 up front fees we keep 200% of the royalties. Could that be? Seems generous on their part. I will find out from them, I hope this is the case! Thanks again...eo.

[mazz]

You need to get that clarified. ASCAP states the full royalty as 100%, my understanding is that BMI states it as 200%. In other words, in ASCAP-ese, 100% of the writer's share is 50% of the total. In BMI-speak, 100% of the writer's share is 100%, which is half of the full royalty percentage of 200%.

It's all the same dollar, it's just how they choose to show the splits.

Confused yet?

[eeoo]

Yeah, kinda strange. The hopeful thing is that they only specify the publishers share which leads me to believe that the writers share is ours.

[mojobone]

Ah, I get it, now. If the fee is north of $3500, it's probably advertising; means good luck collecting from ASCAP; since they're (the publisher/library) not owed any back end royalties, they're not obligated to try to help you collect them. A dirty little secret; while royalties are owed for advertising licenses, (at least technically) it's very difficult to collect on what ASCAP considers a jingle. (I'm hearing that BMI ain't much better) It's one reason upfront licensing fees are still pretty high in the ad biz while they're falling in most other market sectors.